Europe 23 Oct 2013

Alignment of calculation processes and consistency in approach will complement the characteristics of enhanced electronic filing, and we believe that the EU executive should look to the future benefits of coordinated treatment across the Union. A common experience of VAT reporting would bring the possibility of a true ‘one-stop-shop’ closer. We thus encourage the Commission to effectively engage with administrations and import the best practices from across the EU in developing the model for submission

—Chas Roy-Chowdhury, head of taxation,ACCA

ACCA has worked closely with the EC on this project and welcomes the innovative approach being promoted to help make the administration of the VAT system less onerous for businesses and fiscal authorities

Chas Roy-Chowdhury, head of taxation at ACCA says: 'It is not an easy task for companies wishing to operate across border to comply with the various VAT reporting rules currently in place in the EU 28. We therefore commend the publication of this very useful business focused proposal, which we have worked closely on together with the European Commission and other interested groups and forums. We believe that it represents a step in the right direction to help companies, especially the small ones, to make the most of - and possibly expand - their business opportunities in the single market. The EC has committed itself to 'think small first' in its 2008 Communication on a Small Business Act for Europe, and ACCA has been a champion of SMEs’ interests both in the response to the Green Paper on the Future of VAT and on other platforms since.'

For ACCA, restricting the number of possible boxes on the VAT return form and aligning their content and presentation across the EU should help reduce significantly the learning burden on small businesses. The SME, when setting-up in another member state, may find itself needing to register for VAT in the other jurisdictions whereas they may not have been required to register in their home market. Being able to rely upon their domestic guidance and advice that should be applicable across the EU would benefit both administrations and taxpayers.

Chas Roy-Chowdhury explains: 'The Commission is being pragmatic and completely appropriate in its proposals to set an upper national limit of 26 boxes, with just 5 mandatory items required across the Union. The proposals should in principle not disturb the existing light touch approach that several jurisdictions have already adopted, and support those member states with very detailed VAT returns streamline in completing the modernisation of their requirements.'

ACCA has been constantly arguing that a clear, simple and standardised approach to VAT reporting would help enhancing transparency and facilitate more coordinated exchanges of information. These count amongst the key elements of the principles of tax good governance, which the Commission is actively seeking to promote.

The global accountancy body also supports the preference for electronic submission of information directly by the taxpayer, which will in many cases - and increasingly - be the most convenient format for both taxpayers and tax authorities.

Chas Roy-Chowdhury adds: 'Alignment of calculation processes and consistency in approach will complement the characteristics of enhanced electronic filing, and we believe that the EU executive should look to the future benefits of coordinated treatment across the Union. A common experience of VAT reporting would bring the possibility of a true ‘one-stop-shop’ closer. We thus encourage the Commission to effectively engage with administrations and import the best practices from across the EU in developing the model for submission.'

'It is also worth mentioning that a further advantage of the reduced requirements for disclosure, especially where governments fully embrace the opportunity to streamline their own data collection, is the ease with which alternative capture methods can still be accommodated for those taxpayers unable for whatever reason to submit online,' Chas Roy-Chowdhury concludes.